Pakistan's total liquid foreign exchange reserves reached $20.7 billion historic high mark, supported by arrival of foreign inflows from multilateral and bilateral sources. Since the beginning of this fiscal year, the country's foreign exchange reserves are moving upward and after arrival of over $300 million syndicated financing during the last week, it surged to all time high level.
According to State Bank of Pakistan's (SBP) weekly forex report issued on Thursday, the country's total liquid foreign reserves increased $258 million during the last week. With current surge, Pakistan's liquid foreign reserves increased from $20.45 billion as on December 4, 2015 to $20.71 billion historical mark as on December 11, 2015. Overall, since the beginning of this fiscal year (FY16), Pakistan's foreign exchange reserves posted an increase of $2 billion.
During the period under review, SBP's liquid foreign reserves increased by $278 million to $15.719 billion compared to $15.441 billion in the previous week. The increase in reserves is attributed to receipts of $300 million on account of long-term syndicated financing for government of Pakistan. However, during the week under review, reserves held by the banks declined slightly by $20 million to $4.99 billion. The country has received some $1.2 billion in last two weeks (November 27 to December 11, 2015) from multilateral, bilateral and other official sources, which include $500 million from World Bank and $400 million received from Asian Development Bank. These inflows and increasing home remittances have largely contributed to push the country's forex reserves at historical level.
According to SBP, the improvement in Pakistan's external sector that began last year (FY14) and consolidated further in FY15 as foreign exchange reserves registered an increase of $4.6 billion to reach $18.7 billion at end-June 2015 (FY15). "The net international reserves (NIR) are in much better shape than before due to official inflows and SBP's spot purchases from the interbank," SBP revealed in its recent report.
The International Monetary Fund (IMF) programme lent major support to Pakistan's reserves position during the last year. This programme provided $2 billion net foreign exchange support as against the retirement of $0.6 billion to the Fund during FY15. SBP said that the successful continuation of IMF programme induced confidence among other lenders, which enabled the government to fetch $1.8 billion during the last year via Sukuk issuance and divestures, and gather International Financial Institutions (IFI) funding for various public projects.
The availability of external funding made it easier to finance the current account deficit, which was already muted due to record-high worker remittances. IFIs and credit rating agencies have corroborated improvement in sovereign health, and overall stability in Pakistan's external sector, it added.
Comments
Comments are closed.